Sept 24 (Reuters) – Starbucks will close 250 underperforming coffeehouses in North America, the company said in a regulatory filing on Thursday, as CEO Brian Niccol deepens his turnaround push to revive sales.
The closures come a year after Starbucks shut down several underperforming stores in the region, including its iconic Seattle roastery, in a restructuring effort that was estimated to cost the company about $1 billion.
The company disclosed on Thursday the fresh closures will result in about $300 million in restructuring charges, and represent about 1% of its roughly 18,000 stores in North America. It plans to finish most of the closures by the end of fiscal year 2026.
Starbucks also expects fiscal 2026 global net new store openings for company-operated and licensed coffeehouse to be about 440, compared with its earlier target of 600 to 650 openings.
Niccol completed two years as CEO of Starbucks in September. The former Chipotle Mexican Grill executive has tried to draw back customers with shorter wait times and simpler menus in the United States as part of his “Back to Starbucks” plan.
Starbucks also invested in store and kitchen operations, and has tried to manage costs by cutting several corporate roles and shutting down some regional offices.
As of July this year, the company has reported four straight quarters of comparable sales growth. Customer traffic increased across all income cohorts, Niccol said in April.
The company has also refreshed its loyalty program and add-ons such as protein cold foam, helping drive sales.
Its pricey lattes have resisted a broader slowdown in non-essential spending, particularly among lower-income consumers in the United States as households buckle under high costs of fuel and food.
(Reporting by Juveria Tabassum in Bengaluru; Editing by Shinjini Ganguli and Devika Syamnath)
Comments